Economic Illiteracy   14 comments

This is my series looking at the Democratic candidates from a libertarian perspective. There are 23 declared candidates. I’m working off the following list of 13 because they have qualified for the debates later in June. I’m looking at them from lowest rating to highest.

Elizabeth Warren has fallen a LONG way in the polls since the Cherokee Nation disavowed her. My cousins on the nearby Wyandot Reservation don’t much like her either. We’re all pretty white-looking in my tribe. Our hair might be dark, but our eyes are often green and sometimes blue. We’re a long way away from our mythical Turtle Island, but at least we have tribal cards to prove we have Indian blood in our veins.

Elizabeth Warren

Warren participated in a town hall in March and her biggest attention grabber of the night was her proposition to get rid of the Electoral College. In fairness to the Senator, the Electoral College has been questioned at some point in virtually every election cycle since the year 2000. I like it because it prevents the less populous rural regions that produce our food and fuel from becoming serf zones without any voice in national policies that affect them — policies like those of Marianne Williamson that would simply gut the economy and leave producers like rural residents without any recourse but the government dole.

What’s more concerning about a potential Warren presidency is her inarticulate ideas on health care and her desire to break up the big tech companies.

Warren got lucky and missed out on most of the hot-button issues of the night, but when asked about the Medicare for All proposal, Warren prefaced by saying “some people” say we should lower the age to 30. What’s important, Warren said was “that everybody has to come to the table on this.” Only then will we be able to truly know how to implement a Medicare for All solution. But who exactly is this elusive “everybody?” She didn’t really elaborate and I doubt the average working American or the people who will be paying that bill (the “wealthy) will be invited.

Warren was adamant that this “everybody” needed to come together because the issue at hand is so drastically complicated. This is an accurate statement by the Senator, who is not known for accuracy. The United States healthcare system is insanely complex. It’s a hodgepodge mixture of public and private options, with protectionist policies that prevent our neighbors to the north from even selling us lower cost pharmaceuticals. It’s a disastrous mess.

Which begs the question — Is the medical care system broken because of private enterprise or because of deliberate government policy? Senator, unlike her chicken shit opponent Cory Booker, touched on this issue, advocating for the relaxation of protectionist drug policies. That would be a tremendous step in the right direction.

Yet, she is also firmly entrenched in the notion that a centralized board can repair the fractured medical care industry. With the complexities involved, I think Senator Warren overestimates the capabilities of a centralized solution. Centralized solutions rarely work and I don’t know how many times we need to revisit that lesson before we learn it.

F.A. Hayek spoke on this issue quite a bit in his book, The Road to Serfdom. To paraphrase Hayek, the more complicated the industry, the more necessary it is for free competition. This is because the more complex an industry is, the less likely that a small group of individuals will effectively grasp its intricacies. For Hayek, the government can do just fine in overseeing simple matters such as roads(yeah, Hayek might have been a bit optimistic on that), but their decisions on complex matters would likely just make the situation worse.

Senator Warren did nothing to dislodge Hayek’s observatoin. When pressed on whether or not she would do away with private medical care entirely, she wavered and looked uneasy. She alternated between “maybe so” and “maybe not”. The unsettling reality was simple: she doesn’t know.

One thing she does know is that she wants to break up the big tech companies including, Amazon, Facebook, Apple, and Google. She has this preposterous notion that these companies have too much power over our lives and that somehow we can’t just turn them off. Her notion is founded on a very limited understanding of these businesses.

They’re not monopolies. In fact, they are each other’s biggest competitors, and they compete ruthlessly against each other in the internet advertising business and for dominance in the smart home market.

To call these businesses monopolies is an oversimplified take on their business models. It’s to view Amazon as an e-commerce market, or Google as a mere search engine. It completely and willfully ignores that they are also competing in cloud, hardware, self-driving cars, medical care, smartphones, operating systems, grocery retail, data centers, and just recently, with the Stadia reveal, the video game industry.

They face steep competition in all of these areas. Wal-Mart is growing e-commerce sales by 50% year over year. Etsy and Shopify are the two fastest growing e-commerce businesses in the United States. Google can’t compete with Apple in the smartphone market. Facebook is a dominant social platform, but not for e-dating (Match.com) or professional networking (LinkedIn) and it has direct competitors that are up and coming, which might be why Facebook is asking for regulation of the industry.

To talk about breaking these businesses up is not only taking a narrow view of their operations, but it also blatantly disregards just how much the consumer has benefited from their innovation.

Why do they relentlessly pursue innovation? It wouldn’t make much sense to pursue innovation if they could just rest on their monopolistic laurels. On the other hand, their relentless pursuit to diversify is a direct acknowledgement of the precarious nature of the dominance hierarchy within the tech industry.  

Consumers, however, will fail to benefit if Warren gets her way.  Her policies will result in a dramatic leveling of the tech industry just when we need it the most. Automation, space travel, and advances in medical care are just within the reach of Amazon, Google, and Apple. It would be a shame to watch the government stifle their ambitions.

So I think you can figure out my libertarian objections to Elizabeth Warren becoming President.

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